Q: When we moved into our single-family rental, we didn’t have a pet. Our security deposit was below the legal limit in our state. When we told the landlord that we’d like to have a dog, the landlord said OK, but increased the deposit (again, still below the legal limit).
Unfortunately, the dog didn’t work out — we had to give him back after a month. We’d like that extra deposit money back, but the landlord says he’ll return it with the rest, when we leave. Is he allowed to keep it, now that the dog is gone? –Paul P.
A: We’re missing a critical piece of information here: Does your lease address the issue of a pet? The answer to my question determines the answer to yours.
Let’s assume that your lease explicitly did not allow pets, and you needed the OK from your landlord to get the dog. When the landlord agreed, technically speaking he was changing a term and condition of the lease — something that cannot be done with a lease unless both parties agree. At that point, he was free to suggest a change in another clause — the size of the security deposit — but again, he could do so only if you agreed. And obviously you did.
But did you both also agree that the added amount would be handled separately from the rest of the deposit? I don’t think so, for if you had, you wouldn’t have needed to send me this question! Without an explicit understanding that the new deposit would be in effect only as long as you kept the dog, you will have a hard time arguing for its return.
Legal technicalities aside, the landlord has a good practical argument for retaining the whole deposit. The increased deposit was intended to provide coverage for any damage the dog might do. The landlord may not know about any such damage until you move out, even though the dog is long gone.
Let’s look at the other possibility — that your lease is completely silent on the issue of a pet. In that case, you did not need the landlord’s permission to get a dog. I’m thinking this might be so, because you say that you "mentioned" that you’d "like" a dog — that isn’t the same as asking for permission. Perhaps telling the landlord, "We’d like to have a dog," simply described your family’s longing for canine company.
Now, if your lease didn’t prohibit pets, and you did not need permission to get the dog, you could have gotten the dog and refused to agree to an increased deposit (remember, both sides must agree to a change in a lease clause while the lease is in effect). But alas, you apparently did agree to an increase, even though you didn’t get anything for it (that is, you didn’t get any rights that you didn’t already have).
In a very technical sense, your landlord’s insistence on an increase in the deposit could be challenged as a one-way deal (lawyers call it a "failure of consideration"). This is just another way of saying that each side must give something and get something in order for an agreement to be enforceable. Because you got nothing you didn’t already have, you might argue that the landlord should return the added sum. A judge who likes contract law might, just might, go for it.
Q: We require our tenants to carry renters insurance. But when a tenant recently ruined the hardwood floor in his living room (his aquarium leaked), we found out that he had not paid the premiums, so he had to pay out-of-pocket. Not surprisingly, he asked to be allowed to pay for it over time, which we reluctantly agreed to. How can we make sure our tenants get and keep their policies? –Aileen G.
A: It’s a shame your tenants were so short-sighted that they didn’t keep this very modestly priced coverage in place. For a few hundred dollars a year at most, renters insurance will cover the tenant’s own belongings that are ruined, destroyed or stolen; and it will cover the tenant in case his negligence damages or destroys others’ property or causes personal injuries. Policies also cover living expenses in the event that a disaster destroys the property and the tenant has nowhere to live.
In some states, it’s not legal for landlords to require their tenants to carry such insurance, but the majority do allow it. (For a good description of renters insurance, see the Insurance Information Institute article, "Renters Insurance.")
While it’s a good start to require, in your lease or rental agreement, that the tenant carry property and liability insurance (assuming it’s legal in your state), it won’t do you much good unless you see proof that the tenant has followed through. You’ll also want to specify what will happen if the tenant buys the policy but lets it lapse.
Your lease clause should require the tenant to purchase a renters insurance policy within 10 or so days of the move-in date. That gives the tenant plenty of time to shop around, though it’s actually very easy to simply buy a policy online (there’s not too much variation out there).
You should also require the tenant to obtain certificates of insurance from the issuing carrier, for both the personal and the liability policies. The insurance industry has a universally used set of forms that carriers routinely (and at no charge) fill out for precisely this purpose.
They’re called "ACORD" forms, named after the outfit that designed them, and you’ll want an ACORD 25 (for the liability policy) and an ACORD 27 (for the personal property policy).
Keep in mind that these certificates are informational only. They confer no rights on you, which means that you won’t be notified if the renter is foolish enough to cancel the policy or let it lapse. The best you can do is to require the renter to obtain fresh certificates every time he pays a premium. It’s a bother, for you and the renter, but there’s no better way to know for sure that your tenant has complied with your rule.
If the tenant fails to provide proof, you may want to terminate the tenancy. If you want this option, your lease clause must specify that failure to obtain and maintain the described policies will be a material breach of the lease, for which you may terminate.
